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The netmask is used to determine how much of the source address is used to create an entry in the database - i.e. the network component rather than the host component is used. If you use a /16 mask then the first client to connect will create a sticky database entry and all subsequent clients from your NATTed range will match that entry and be load-balanced to the same server. This is probably not what you want.

I tend to use a /32 mask to balance each client individually but if your clients are evenly distributed across the /16 you could use a /24 mask and create fewer sticky entries in the database.